Corporate insiders — executives and directors — must report every trade in
their own company’s stock to the SEC (Form 4) within two business days.
These filings are public, and they are one of the strongest sentiment
signals available to ordinary investors.
Buying means one thing
Insiders sell for many reasons: taxes, diversification, a house.
They buy on the open market for only one reason — they expect the price
to rise. Cluster buying (several insiders in the same month) is
historically one of the most reliable bullish patterns.
What to check
Open-market purchases matter; option grants and scheduled (10b5-1) sales
mostly don’t. Size relative to the insider’s salary matters more than the
absolute dollar amount. A CFO buying is often more informative than a
director buying. Our stock reports include a
Smart Money section with each company’s recent insider activity.
Yes. The illegal thing is insiders trading on non-public information.
Reading their public filings and acting on them is exactly what the
disclosure system is for.
Related terms: P/E Ratio (Price-to-Earnings) · Free Cash Flow (FCF) · Institutional Holdings (13F) · Stop-Loss
This glossary entry is part of Veqtio’s investing reference. Explore our AI-driven stock reports and the transparent Investment Log of every call we’ve made. Not financial advice — see the disclaimer.